Redding Home Prices Show Continued Stability
FHA LOANS, INDUSTRY NEWS, TIPS FOR BUYERS
August 10th, 2009
After falling roughly 40%over three years, home values in Redding appear to be stabilizing. A local appraiser that monitors home prices monthly released the most recent statistics for Redding and surrounding communities indicating the average cost per square foot is $131. That is down slightly from June’s $133/square foot.
January 2009 saw the Redding average at $138. The average sales price began the year at $244,803 compared to July 2009 of $230,553. Anderson and Shasta Lake City home prices average $157,763 or $112/square foot, down from $164,644 and $117/square foot in January 2009. One reason the averages are lower for Anderson and Shasta Lake has to do with sample size. Smaller numbers of units sold lead to more variations.
At the peak of the market, the average home price in Redding hovered around $300,000. One could get a rough idea of their home’s value by multiplying their square footage by 200. Some homes are selling for half that today! What appears to be bad news for home sellers is good news for home buyers. Combine depressed prices with low interest rates and you have a window of opportunity for first-time buyers and investors.
Investors are finding that buying rentals in the current market makes sense. Low prices and interest rates make these properties pencil out assuming a reasonable downpayment of 25-30%. Rents have not fallenwith home prices. Investors can purchase a home in good condition around $200,000 and break even after paying interest, taxes and insurance on their mortgage. Rents in Redding for a three bedroom avearage $1,100/month.
First-time buyers are jumping into the market after years of waiting out the market. FHA loans remain popular for those buying their first home. These loans require only 3.5% down and have less stringent underwriting guidelines than conventional loans. The seller can assist buyers utilizing FHA loans with closing costs. This allows buyers to leverage their available cash to buy their first home. Move-up buyers also find FHA loans attractive if they don’t have enough cash to move forward after selling their smaller home.
The number of home sales pending has nearly doubled since January. Home buyers in Shasta County have gotten the message about low home prices and interest rates and have stepped up and made the plunge into home ownership. I expect an influx of retirees once the recovery takes hold in the larger metro areas of California. Sales of upper end homes remain sluggish in Shasta County with more than 80% of sales occurring below the $300,000 price point.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL SALES EXPERIENCE
